The Deep State Strikes Again


In a budget hearing before the Senate Appropriations Committee, Attorney General Merrick Garland assured Sen. Susan Collins of Maine, “I promise you, it will be at the top of my list.” Tops on the Justice Department’s To Do List pledged Garland, is to investigate the source of a massive leak of the tax returns of America’s wealthiest citizens.

The IRS has a long and scandalous history of failing to protect tax information, or even worse, using it for political purposes.  Brian Garst of the Center for Freedom and Prosperity cites a few instances in recent years on his blog:

  • In May 2015, the IRS reported that data on 100,000 taxpayers was stolen by ‘organized crime syndicates’ who exploited an application on the IRS website to view the past returns of victims.
  • IRS officials have even been jailed for criminal schemes that took advantage of their access to private taxpayer information.
  • The IRS admitted wrongdoing and paid $50,000 in a settlement with the National Organization for Marriage for leaking confidential information from the organization’s tax returns to its political opponents.

So the IRS leak that “coincidentally” happened as the Biden administration is proposing to hike taxes on the incomes of the top 1 percent shouldn’t surprise us.  Biden also wants to raise IRS enforcement funding by $80 billion to come after these high earners.  And Treasury Secretary Janet Yellen wants banks and other financial institutions to report how much taxpayers have in their accounts, whether income was earned on those accounts, and how much was transferred in and out.

Those of us of the other 99 percent of the population can’t help but feel troubled by all this. Tax documents contain social security numbers, addresses, bank and brokerage information, and charitable donations.  The “deep state” has demonstrated just how far it would go to wield its power to advance or thwart a political agenda.  And the coronavirus pandemic has revealed just how vulnerable Americans are.

In California, this has played out in the case Americans for Prosperity v. Becerra, now before the U.S. Supreme Court and which PRI filed an amicus brief. California law requires that charities like PRI and AFP submit to the state a list of the names and addresses of major donors on their tax forms.  Even the ACLU, which probably disagrees with AFP on most everything, filed an amicus brief in support of AFP.

The ACLU argued that while California claims to keep donor information confidential, the state’s sloppy security “inadvertently published more than 1,700 Schedule B forms on a public website, over a period ranging from 2012 until the eve of trial in this case.” The heart of the problem: “Donors to nonprofit groups across the political spectrum reasonably fear that their private information will become public if it’s handed over to the State, and will limit their associations accordingly, causing significant financial harm to the nonprofit organizations they support,” states the ACLU.

The bottom line is that government is inept at handling confidential information, and career bureaucrats can’t always be trusted.  Ironically, whoever leaked the tax filings of America’s billionaires probably did more to argue against Biden’s agenda than free marketers.

Rowena Itchon is senior vice president of the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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